Barratt back in black after three years

Housebuilder Barratt Developments posted its first underlying profit for three years yesterday as a squeeze on building costs and focus on family homes offset a sluggish housing market.

Building more houses instead of flats and apartments helped the firm record underlying profits of £42.7 million in the year to 30 June, up from a loss of £33m a year earlier.

Completions, or unit sales, fell slightly to 11,171, but higher selling prices, especially on the private sale side, held revenue steady at £2.04 billion. The average price for a privately sold Barratt home rose by 7.4 per cent to £198,900, as the proportion of houses in its total sales rose from 60 to 66 per cent.

The group, which also got a lift from its strong presence in the buoyant London market, said it expects houses to account for 70 per cent of sales in the year to June 2012. Chief executive Mark Clare said: “We have made considerable progress in rebuilding profitability – by optimising selling prices, improving operational efficiency and securing new higher-margin land.”

But he added: “Whilst we expect progress to continue, further recovery in the housing market remains dependent on improving economic conditions and the ability of our customers to secure mortgage finance.”

The group, which also trades as David Wilson and Ward Homes, intends to increase completions in the current year with the number of active sites due to rise to 400 from 354.